Gerald
Jones - the Chief Executive
of Wandsworth Borough Council
on the sale of the Putney Garden
Centre site.

Councils
have an absolute duty to manage
their financial affairs honestly,
prudently and in proper accordance
with the law. There are very
strict limits on what individual
councillors may or may not do
with penalties for non compliance
including ultimately disqualification.

As
Finance Officer and Monitoring
Officer respectively, it is
the duty of the Director of
Finance and myself to ensure
councillors do not take financially
or legally improper decisions.

I
am aware that individual councillors
have been subjected to enormous
pressure to allow the disposal
by sale or lease of council-owned
land at 1 Dryburgh Road to its
current garden centre occupier
for a sum or on terms that would
not reflect true current market
value.

However
to do so would be a clear breach
of the Councilís legal duty
to obtain best consideration
and the fiduciary duty owed
by the council to all its residents
in all parts of the borough.

Where
a Council does arrange to subsidise
e.g. through a grant a commercial
operation there must be clear
reasons for doing so Ė for example
that the enterprise is employing
and training people with learning
difficulties, or otherwise making
a contribution to meeting special
needs of some sort. It is perhaps
relevant to note that even where
the Council has sold or let
school buildings to the independent
sector it has always done so
at full market value.

The
council has a statutory duty
of Best Value which requires
it to review all services including
its property portfolio over
a five year period. In fact
the council has a longstanding
policy of disposing of all its
surplus land that is not needed
for its own services. This policy
is strongly advocated by both
the Audit Commission and the
Government.

Therefore
when the tenantís lease was
approaching its end the Council
reasonably decided to review
the landís use and to obtain
a realistic valuation in keeping
with long-standing practice.
In fact given its previous planning
history and the Councilís fiduciary
duty and duty to obtain best
consideration, the Council was
obliged to protect Council tax
payersí interests by realising
any development value by making
a planning application for residential
use.

The
Council of course was fully
aware that a planning permission
for residential use (in addition
to the existing retail consent)
would maximise the value of
the land. To pretend that there
was ever an option of ignoring
this prospect is to misunderstand
totally the nature of councilsí
legal responsibilities for the
publicly held assets in their
care.

The
decision of the Policy and Resources
Committee to release the site
and invite offers from would-be
purchasers was made unanimously
in November 1999. It is important
to recognise that there has
never been any suggestion that
a reasonable policy supporting
a sale at an under-value could
or should be developed.

A
short tenancy settled now at
a lower rental in the hope that
the loss this would represent
could be recovered by an enhanced
receipt some time in the future
is to indulge in property speculation.
Councils have no right to gamble
with public money.

It
is perhaps not always fully
understood just how tightly
the rules for councilsí conduct
in property and financial matters
are drawn. Ultimately it is
my responsibility to ensure
that these inescapable obligations
are scrupulously respected in
all transactions and that the
councilís reputation for integrity,
legality and fair-dealing is
preserved.